Returns and Standard Deviations Consider the following information: State of Economy Probability of State of Economy Rate

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Returns and Standard Deviations Consider the following information:

State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom .65 .07 .15 .33 Bust .35 .13 .03 −.06

a. What is the expected return on an equally weighted portfolio of these three stocks?

b. What is the variance of a portfolio invested 20 percent each in A and B , and 60 percent in C ?

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Corporate Finance With Connect Access Card

ISBN: 978-1259672484

10th Edition

Authors: Stephen Ross ,Randolph Westerfield ,Jeffrey Jaffe

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Question Posted: Jul 10, 2024 08:00 AM

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Returns and Standard Deviations Consider the following information: State of Economy Probability of State of Economy Rate

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Corporate Finance With Connect Access Card

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